WHOSE LOSSES COUNT IN NATURAL RESOURCE DAMAGES?

This article examines economic and legal constraints that determine whose losses are included in natural resource damages as a result of an oil spill or hazardous-substance release. For example, the article describes the circumstances under which use losses experienced by young children would not be included in natural resource damages. With respect to nonuse damages, the article advocates excluding the expressed losses of people who have no knowledge of the specific natural resources affected by a spill/release and who are unaware that the natural resources were injured. In the absence of such knowledge and awareness, these people could not have experienced a welfare loss. Finally, the article discusses legal constraints on whose losses count in natural resource damages with respect to statutory exclusions, public versus private uses of natural resources, uses of natural resources by foreigners, and damages in the absence of injuries. Copyright 1997 Western Economic Association International.